- 10 - Kovacevich was a statutory employee because at all relevant times he served as petitioner’s president and secretary-treasurer, worked in all significant aspects of petitioner’s business, performed substantial services for petitioner in his capacity as an officer, and obtained remuneration for such services from petitioner as his needs arose.2 III. Section 530 of the Revenue Act of 1978 Section 530 provides relief from employment tax liability, notwithstanding the actual relationship between the taxpayer and the individual performing services. Sec. 530(a). The taxpayer, however, must establish: It did not treat the worker as an employee, filed all returns for periods after December 31, 1978, “on a basis consistent with the taxpayer’s treatment of such * * * [worker] as not being an employee”, and had a reasonable basis for not treating the worker as an employee. Sec. 530(a)(1) and (2); Joseph M. Grey Pub. Accountant, P.C. v. Commissioner, supra at 123. 2 Petitioner contends that the Court’s determination of whether Kovacevich is an employee or independent contractor is controlled by Clackamas Gastroenterology Associates, P.C. v. Wells, 536 U.S. __, 123 S. Ct. 1673 (Apr. 22, 2003). We disagree. In Clackamas, the Court simply held that in determining whether four director-shareholder physicians were employees or employers for purposes of the Americans with Disabilities Act of 1990, “the common-law element of control is the principal guidepost”. The Court did not consider whether these individuals were employees or independent contractors for FICA and FUTA purposes. For employment tax purposes, Kovacevich is a statutory employee pursuant to sec. 3121(d)(1), and we need not resort to the common-law principles considered in Clackamas.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011